Fidelity - requesting customer profile info


We have accounts with Schwab, Fidelity, TRowe, & Vanguard for decades...
Just recently we received mailings from Fidelity - no one else - requesting Customer Profile information... indicating that the SEC "requires" this be filed with each brokerage/broker.
I could see some of the basic info, but it was interesting that some of the "profile" questions were more on the potential marketing side of the house...
This type of intrusion really bothers me. Trying to squeeze info for future marketing under the guise of SEC required info...
Reply to
ps56k

"ps56k" writes:
The SEC requires them to ask. It doesn't require an answer.
This stuff goes into the stew of information they use to demonstrate that they are conforming to the "suitability" requirements that B/Ds operate under.
It should have been standard questions such as your net worth, your investment experience, your risk tolerance.
All B/Ds ask these questions. Some re-ask on a regular basis or if you didn't answer (and you aren't necessarily required to answer, especially if the B/D isn't actually advising you in any way), they'll note that you don't have answers in their database and ask again.
I think you may be reading too much insidious intent into it.
Just don't answer if you don't like. Did they threaten to suspend your account or something?
Reply to
BreadWithSpam

tnx for the insight - I'll update some of the info...
It's just that sometimes an org uses their own customers to mine for much more..... which is classical marketing, just don't abuse it.
Donated once to Habitat - and then they started calling and calling and...
Our son opened a BoA account before going to school abroad, and then BoA started calling us repeatedly trying to sell him life insurance, etc -
And just the other day - Chase "business manager" called on my cellphone voicemail "about our account"... (we happen to have a large cash amount temporarily sitting there)
Reply to
ps56k

Some years back my wife and I bought a CD at a bank. We then received a several calls from our "financial advisor" (the bank's label for the person we dealt with, not ours) suggesting that we could find "a better use for the money." What she had in mind, of course, was the bank's family of mutual funds. When we said, "Please do not call us any more about this," the calls stopped. In retrospect, we got a disappointing little bit of interest on the CD, but if we had taken her advice we would have lost about half the money.
Reply to
Don

Good for you. That "advice" was not meant to benefit you.
I have a simple rule that worked very well for me.
I flat out never seek any commercial investment advice, and especially from anyone who seeks me to give some advice, I would not even listen.
As everyone knows, I ask and get advice here, as well as in other places. I got a few valuable ideas this way. The reason is that in this setting, no one stands to benefit from their own advice, so the advice is not tainted by profit considerations, and bad ideas can be separated from the good ones.
Mildly related, I recently had a realization, just a clarification of what was brewing in my head for a while, which is that simply being a contrarian, and avoiding doing what everyone is doing, even if somewhat mindlessly, has huge advantages. The advantage is that those who follow what everyone else is doing, overpay for assets or sell assets at very disadvantageous prices. Simply staying away from that, already prevents major losses.
Warren Buffett said two somewhat contradictory things. One is that he does not care at all what others investment opinion is and what is the prevailing wisdom. Yet, he also quipped famously that he is "fearful when others are greedy, and greedy when others are fearful". That is not exactly complete idnependence from the public opinion. I gravitate more to the latter concept, and do not feel that I can completely discard public opinion and mood. I do think, though, that I could use it to my advantage by being a contrarian in the above described sense.
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Reply to
Igor Chudov

Those are good points. Indeed, a valuable general rule to keep in mind is that unsolicited financial advice is bad. An ad on TV or in a newspaper for some mutual fund or other financial service, always makes me ask: Who is paying the very considerable cost of that TV ad and why? Are the costs included in the MER of the fund? If so, I would far rather invest in a low profile fund with a smaller MER and no ads. Maybe it is not really advertisement. Maybe the TV network is telling everybody the facts about that mutual fund as a public service. Maybe pigs fly.
Reply to
Don

If it will make you feel any better E*Trade requires the same thing. Like the size of my portfolio. It wouldn't suprise me if they make use of this information as much as they can.
Reply to
Cam

Don writes:
In the case of all funds - and every business that exists - the costs of those ads are paid for by the business's customers.
In the case of many of those businesses, particularly the ones where they run a tight ship and can take advantage of the economies of scale, those ads actually help keep the net costs to the customers low. With enough volume, the fixed costs can effectively vanish.
That's one of the reason a certain few mutual funds with enormous asset bases are able to charge such amazingly low expense ratios. Not all of them lower expenses in tune with things like this. But some do.
Reply to
BreadWithSpam

In a sense, all advertising is an example of "unsolicitated advice." A TV ad may say "Buy XXX for your benefit in retirement," and a lot of people listen with interest. Some may think the message is offered to them as a service.
On the other hand, when advice on how to invest arrives out of the blue via email, more people would be skeptical about it. Every once in a while I get serious investment advice by email from Nigeria.
I see a continuum between the above two classes of advice, not a hard and fast distinction. Betweem legitimate advertisements in the public media and out and out scams from murky sources, there is a whole range of intermediate stages.
Reply to
Don

A few of their offerings you cannot buy unless you meet "high" or "very high" net worth thresholds: income or liquid assets. SEC regs. As far as I can tell, you dont actually have to prove any of it, but just state it is so when you sign the application. They wont even tell what some of these offerings are unless you have have high net worth.
Reply to
rick++

Igor Chudov writes:
The term you're looking for is "accredited investor".
Here's the SEC's FAQ on it:
In short, net worth > $1million, or income > $200k/$300k for individuals. Different for trusts, businesses, orgs.
Reply to
BreadWithSpam

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